Para 6.1.4 - Electronic Bank Guarantees | KartavyaDesk

Original Rule Text

6.1.4 Electronic Bank Guarantee (e-BG) 1. Background: Electronic Bank Guarantee is a dematerialised Bank Guarantee processed on National e-Governance Services Limited (NeSL) (an Information Utility registered with the Insolvency and Bankruptcy Board of India under the aegis of the Insolvency and Bankruptcy Code). It handles all lifecycle events of e-BG - execution by the issuing Bank, intimation to and verification by the beneficiary, amendment, invocation or release by the beneficiary, cancellation, etc. The facility is available 24/7, including non-working days. Beneficiaries and banks can continue to use their own BG templates. All bidders may be encouraged to submit e-BGs instead of traditional paper-based bank guarantees. 2. Creation of e-BG: The procuring Entity should ensure that the bidder/ contractor is informed (in the tender documents) of its Unique Identity Number (UIN – which can be allotted by its Bank) and email ID. A clause regarding e-BGs may be included in the tender, acknowledging, and accepting the use of e-BGs as a valid form of bank guarantee for the tender process. The procuring entity may reserve the right to verify the authenticity of eBGs and take necessary actions in case of discrepancies. The UIN and email ID of the beneficiary are specified by the issuing bank when creating the e-BG on the NeSL portal upon being approached by the bidder/ contractor. On creation of e-BG, it is stored on the NeSL portal. 3. Intimation to Beneficiary: NeSL shall send a notification to the email ID of the beneficiary provided by the issuing Bank (as well as the beneficiary’s registered email ID) during issuance or subsequent event of e-BG (amendment/ invocation, release/ cancellation, etc.). The Procuring Entity can receive the email notification without registration, but such an email shall not have the e-BG document attachment. The issuing Bank can also arrange to forward the e-BG to the beneficiary through the applicant or any other mechanism. 4. Registration and Login: Beneficiaries and their authorised representatives must register with NeSL using UIN and email ID. They must log in to the NeSL portal using the same details to view, download, verify, or release/ invoke the e-BG. Integration with Government procurement portals (CPPP, GeM, State Govt procurement portals) is being explored to facilitate e-BG access without needing to log into the NeSL portal. 5. Easy Verification: Verification of the e-BG stored in NeSL is sufficient, and verification with the issuing Bank is not required. This is a significant benefit for procuring entities. 6. Invocation and release: The e-BG process through NeSL facilitates beneficiaries submitting requests for invocation or any other consents through digitally signed submission in the NeSL portal without the need to approach the issuing bank.

What This Means

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Key Points

• •Encourages the use of Electronic Bank Guarantees (e-BGs) over traditional paper-based guarantees.
• •e-BGs are processed through the National e-Governance Services Limited (NeSL) platform.
• •Procuring entities must inform bidders of their Unique Identity Number (UIN) and email ID for e-BG creation.
• •Verification of e-BG on NeSL is sufficient; direct verification with the issuing bank is not required.
• •Invocation and release of e-BGs are facilitated through digitally signed submissions on the NeSL portal.

Practical Example

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.

Frequently Asked Questions

This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.